Buying farmland - dealing with EA

joanodee

Hi All

I would be thankful for any opinions on this please. Any ideas people out there with more experience in buying land than me!


In March last land beside us went for sale with an asking price of 750k. We thought this funny money and its way out of our league - this price would probably have been its worth on a very very good day during the boom years but defo not now as similar land down the rad sold last year for 320k.

About two different people came to view this land over the few months and then a few weeks ago there was an auction. We went to the auction saying that we would have an interest at 320k but thought this would not happen.

At auction we all turned up the neighbours at ourselves rubber necking and he started at 750 went to 350 and withdrew no bidders. At the auction there was a 2nd auctioneer apparently bidding for someone and he offered 320 then we spoke to the auctioneer and offered 330 it was left at this for a week

After a week I got a call from the auctioneer and he said he had 775k on it I was a bit shocked he heard this in my voice and said he would leave it with me.

After another couple of days he rings me again friday to see had I interest and to tell me he has 380k on it I said it was out of out comfort zone and he said he wouldn't do anything till he heard back from me.

Now each time he rang me I was caught unawares and I never asked about the bidders ect so had no info.

After the weekend I decided I would act and we were thinking of maybe another bid so I rang..............I asked him about the other bidders and he told me that the 375k & 380k bids were the same person a farmer from 50miles away, he also said he had offered him 400k if he would close the sale.........he went on to tell me that our neighbours knew we were interested and wouldn't bid against us even mentioned the neighbours........

He also told me that the vendors had a reserve of 670k!

I told him to get back to me when he was about to bring down the hammer because the vendors seem to be in no rush to sell and I gave him no new bid. To be honest I kind of thought I was being taken for a bit of a mug.


Any ideas people out there with more experience in buying land than me!


Thanks in advance

J

The_Conductor

I have seen something similar happen in Meath in the last few weeks- ok farmland, nothing special- hitting over 15k/acre- and not selling.

Farmland, as you're no doubt well aware, periodically goes through bubbles- and tend to be relatively independent of the greater economy.

Banks are lending again to the farming community- more so than other sectors (where lending remains remarkably muted).

From attending auctions, and keeping an eye on the sector- all I can really say is what you're experiencing is not as unusual as you might imagine it to be- and its entirely possible that the auctioneer is indeed acting professionally and being upfront (I think its the first time I've ever articulated that in this forum).

The suggested price- does sound completely nuts- and unless you can make the finances work as an investment (aka unless you can show with your farm business plan a return of at least 5-6%)- despite any emotional attachment you may have to the land- walk away. Its not worth paying over the odds for it.

handlemaster

Is there an online listing etc for auction prices or listings of what farmland is marking at the moment

jmayo

Youwould probably have to sift through Farmer Journal and Independent to see auction results.
Farmers Journal publish average land prices for every county once a year and they list a few of the better well known bigger sales.

As for the OP's land.
There is a huge fecking difference between 380k and 670k, nevermind 750k.

The auction turned up only a bid of 320 if reading correctly and this was what similar chunk of land sold for last year down the road.
So using that yardstick the asking price and reserve prices are la la land.

Just using average of 10k an acre this works out at 32 acres.
If using lets say average of 5k for bad land, then this works out at 60 odd acres.

I have only ever seen farmers bid on land long distances if it is a complete farm (at least with some sort of sheds and even house) or really big chunk of good land.
50 miles is a long way to commutte to a small portion of land in this country.

Also reason auctioneer may say it is a far off farmer is because there are no local farmers offering anything above 320k.

Bellview

i have seen a similar case like you describe near my parents house. The holding was 15 acres, no building no esb & no water connected. the ground is steep in parts and there is a wet corner.. approx. 1 acre.

In the boom years 2007 the owner put it up for sale... 14 acres of the 15 (as he wanted to hold sites) and in my madness I offered 300k... but for all 15 acres (neighbour land had made 20k an acre). Luckily he told me to bugger off as he wanted 300k for the 14 acres

In the interim years I made a few enquiries to the land and was told I needed to offer 20k... which you can guess my answer. In the meantime I purchased superior land for 10k an acre

roll on to 2015 and the whole 15 acres were sold for 170k at auction... this farm is in Kerry so the Kerry share price can inflate the price a lit

From reading above though it sounds like the vendor and the EA are playing a game that they don't even know how to keep their story straight between 300k & 800k... tough to figure out what is really happening...

depending where you are in the country very few places are worth much more than 10k an acre for good land.